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How will ICD-10 Codes Help Outpatient Procedures?

September 08, 2015

Today there is a lot of emphasis on inpatient coding and billing given that we are just days away from the implementation of the ICD-10 coding system. The necessity of looking at coding for the outpatient procedures is almost negligible, given that just the CPT/HCPCS procedures will be employed and no change is required in outpatient coding procedures.

As part of ICD-10 implementation:

ICD-10-CM codes will be used for all inpatient and outpatient diagnoses

ICD-10-PCS will only be used by hospitals for inpatient procedures

CPT will be used by all healthcare providers for outpatient procedures

However, federal law does not require any change especially for the outpatient procedures. But, it has to be noted that some CPT codes will now be required for reimbursement, especially for the non-covered entities. Further, based on certain Medical necessity criteria, reimbursements of certain outpatient services are restricted by Medicare. And if the diagnosis codes do not support the medical necessity for the procedures submitted, then the claim for payment can be denied. Moreover, outpatients have several other riders, one being that unless a patient signs an Advanced Beneficiary Notice (ABN) prior to receiving the service, the provider may not bill the patient for these services and thus the hospital is left without any payment despite the service rendered.

So although the outpatient procedures under the ICD-10 codes will not be impacted directly, there will be some underlying changes that will be required for the following reasons-

Instead of having two sets of documentation with dual code sets, it’s easier and more efficient to have some standardization, even though the law doesn’t demand it.

Fewer mistakes will be encountered given that ICD-10 diagnosis and procedures now demand more documentation

Avoid loss of cash flow as most often payers require and reimburse based on CPT codes especially for outpatient procedures like lab work done, interventional radiology, and often hospital billers just banish them away since such claims don’t require the ICD-9 codes

According to MedPac’s report to Congress in March 2012 on Medicare Payment Policy, in 2010, the 4,800 hospitals that participated in the Medicare system showed that Hospital-based outpatient business grew by 8.8% over that period, contrasted with inpatient volume increase of 2.7%. Today, outpatient visits account for over 31% of total hospital reimbursement. Given the ACA which plans to bring in nearly 40 million people who have so far had no coverage, the number of outpatients will increase. So if you want to keep those reimbursements flowing, then employing ICD-10 codes also for the outpatient procedures is essential as the benefits far outweigh that of using just the CPT codes for outpatient procedures.

High skill sets for entire coding team whether in-patient or outpatient coders will help with shortage of staff - interchangeability of coders, both outpatient and inpatient, will be beneficial

With improved documentation, better front end solutions will be initiated to check diagnosis against procedures and help determine whether a Medicare service is medically necessary, so the hospital gets paid.

Use of specific codes and better documentation will help enhance data collection and be beneficial for policy healthcare reforms and decisions in the long run

Eventually, payers will require submission of codes for claims processing and payment, even though initially ICD-10 codes may not be required for outpatient procedures

But the most beneficial advantage that ICD-10 coding brings to outpatient procedures will be standardization and better quality research on how to improve health care for the masses.

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